Shell Scraps 820,000 Tonne/Year Rotterdam Biofuels Plant Amid Competitiveness Concerns

Shell has permanently abandoned its ambitious project to construct one of Europe's largest sustainable aviation fuel (SAF) plants in Rotterdam, Netherlands. The decision, announced on September 3, 2025, comes after the energy giant paused construction in 2024 to reassess the project's viability, citing that it would be "insufficiently competitive." The plant, initially launched in 2022, was intended to produce up to 820,000 tonnes of biofuels annually, with over half dedicated to SAF.

The Rotterdam facility was envisioned as a cornerstone of Shell's efforts to transition towards lower-carbon energy solutions and support the growing demand for sustainable fuels. Construction began in 2022, with an initial target to bring the plant online in 2024, later pushed to 2025. It aimed to convert waste cooking oil and animal fats into SAF and renewable diesel.

Machteld de Haan, Shell's head of downstream, renewables and energy solutions, stated, "As we evaluated market dynamics and the cost of completion, it became clear that the project would be insufficiently competitive to meet our customers’ need for affordable, low-carbon products." This decision reflects a strategic re-evaluation of capital allocation, prioritizing projects that deliver both customer needs and shareholder value. The company had already taken an up to $1 billion write-down on the project.

This move follows a trend of major oil companies recalibrating their green investments, with Shell previously scaling back a SAF project in Singapore in March 2023. Critics, including environmental activists, point to Shell's renewed focus on its traditional fossil fuels business and a watering down of its emissions targets. The company's 2025 strategy allocates $10-15 billion to low-carbon projects, significantly less than its $13 billion annual oil and gas investments.

The abandonment underscores the significant challenges facing the sustainable aviation fuel market, which Javier Blas, the tweet author, noted as the "SAF bubble keeps deflating." While the EU mandates increasing SAF usage for airlines, the industry faces hurdles such as limited availability and high production costs. The Port of Rotterdam expressed disappointment, noting the plant would have strengthened Europe's largest biofuels cluster.

Despite the setback, Shell maintains its commitment to biofuels, with de Haan adding, "We continue to believe that low-carbon molecules, including biofuels, will underpin the future energy system." However, the decision highlights the gap between policy ambition and industrial reality in achieving net-zero targets for aviation, raising doubts about the feasibility of meeting 2030 mandates without large-scale facilities.